In the modern digital video compression standards including but not limited to MPEG-X (X=1, 2, 4) as well as H.26L (L=1, 2, 3, 4), compression typically occurs in two steps: prediction in a first step and prediction error correction (residue coding, hereafter) in a second step. In the said video compression standards, two types of prediction modes are provided, namely intra-picture prediction and inter-picture prediction. In inter-picture prediction, a sub-unit of picture currently being encoded (current picture, hereafter) is compared against portions of previously reconstructed picture(s) (recon picture(s), hereafter) and the location of the best matching portion, typically consisting of motion vector, reference picture index and prediction direction (collectively, prediction information, hereafter) are encoded. Some of the digital video compression standards or relevant video compression standards, including but not limited to H.264 (or equivalently, MPEG4/AVC), provide SKIP and/or DIRECT modes for inter-picture prediction. SKIP and DIRECT modes, if selected, do not require encoding of prediction information, and thus require minimum number of bits for encoding prediction information. SKIP and DIRECT modes, if selected correctly, have been proven to be quite effective in improving coding efficiency.
However, prediction information for SKIP and DIRECT modes can be generally different from all the other inter-prediction modes (for the purpose of this invention, details of how other available prediction modes are encoded are not important) and therefore, in the worst case, SKIP and DIRECT modes need to be additionally investigated to decide whether they should be considered in the selection of the best prediction mode. These additional investigations for the SKIP and DIRECT modes require interpolation of image data down to the supported pixel resolution (¼-pixel resolution in case of H.264 standard) and thus significantly increases the computational power requirement as well as the implementation cost. These overheads are undesirable especially for those applications where low cost and low power consumption are critical. Therefore, it is desirable to have novel methods for mode selection with minimal overhead.